Jeffrey Katzenberg: The New Pricing Model For Movies Will Be Based On The Viewer's Screen Size

from the no-it-won't dept

It's been pretty well established that one barrier to movie studios making more money is the silly release windows they apply to their films. As such, you can be sure that many great thinkers and deft minds have been hard at work trying to figure out a new model that will produce just as much coin while nixing the release windows entirely. This article is not about one of those models.

No, this article is about a big bucket of crazy coming from Dreamworks' Jeffrey Katzenberg, who claims that the future business model will be to price out what you pay for a movie based on whatever the dimensions of the screen you're planning to watch it on. Seriously.

Those who watched on a "movie screen" would pay the most while those using smartphones would only pay a small fee, Jeffrey Katzenberg said. This pricing model will be common in 10 years' time, he told a US conference. The pricing model he suggested was $15 (£9) per film for a movie-sized screen, $4 (£2.40) for a 75in (190cm) TV and $1.99 (£1.20) for a smartphone.

This won't happen. I don't mean to say it won't be tried. It might. But it won't last. Why? For a myriad of reasons, not the least of which are the technical hurdles.

The Verge thought the idea faced some technical hurdles.

"Given the diversity of video streaming options available today, it's hard to imagine a security system that would reliably recognise the exact size of the screen it's being displayed on," wrote commentator Vlad Slavov.

And that, frankly, is the least of the reasons why this won't work. Add to that the simple methods for getting around the pricing model (such as hooking up a smart phone to a television screen with a $2 cable), not to mention the simple plain fact that this doesn't make any economic sense. Basing the price of a product upon a physical device that isn't owned by the producer is a bold move. By which I mean it has no basis in established economic theory. Can you imagine iTunes trying to charge you different prices for music based on the size of your speakers? Or video game makers charging more or less based on how much power your computer packs? The product is the product and where it is consumed is the purview of the consumer.

That said, it's nice to see that industry folks are at least coming around to the idea that release windows are going away. I just wish they'd come up with replacement business models that didn't make my head hurt.

"Or video game makers charging more or less based on how much power your computer packs"

isn't that exactly how an increasing amount of business software works. They change by CPU core and increasing the amount of RAM that is in the system. see sql, oracle, vmware as examples. and it is now accepted in the industry. It hasn't moved to consumers level products yet but give it time.

Chromecast

While this is a pretty dumb idea I can support the concept of charging based on the quality of the experience. It is just a lot easier to base the experience quality on the resolution instead of the screen size. I would suggest ~$5 for a 4K picture movie, ~$3.50 for 1080P, ~$2 for 720P and ~$0.50 for NTSC/PAL quality. This also assumes that the theatre experience will be at 4K quality or a close equivalent.

Of course the studios will have to provide a better experience than Netflix before I would even consider paying those suggested prices.

HDCP-2

Translation: The studios are entitled to a new version of High-bandwidth Digital Content Protection (HDCP), this time reporting back the screen size. As with the HDCP rollout, non-compliant screens (including those compliant with the existing HDCP) won't work with it.

The new pricing model for movies will be based on Katzenberg's sense of entitlement.

Re:

I can get on board with that... which is almost exactly how i expect it to work with physical media.

If I buy the Bluray, I expect to pay more than if I buy the DVD. Not because it's really much more expensive to produce, but simply because I'm getting a higher quality output.

FWIW, I'm the kind of guy that doesn't usually mind watching 480p (widescreen) movies on large screen - most movies are enjoyable without high definition. And since I like to keep copies of my movies on my NAS for easy access, I usually rip them down to a lower resolution anyway so I can store more.

You're wrong!

This model would work just fine and is already in use!How to keep the price related to the screen size? Simply offer the movie at different resolutions! For a mobile device, the movie can be set at a resolution of 640x400 and it would look good on your mobile phone but bad on a moviescreen. Make the resolution bigger and it would look great on a television-sized screen. And offer it at 4K resolution and there's your movie theater quality.It is already possible to buy movies at SD or HD formats, at DVD or Bluray, where BluRay is supposed to have a better quality image.No one will watch a 4K movie on a mobile phone either, since it takes a huge amount of disk space and processing power. Just as no one would use a movie at SD format on a 4K-able monitor. It would look just pixelated.Don't think it will never happen since it's already happening today. It even happened yesterday, the day before that, and even further in the past. Jeffrey Katzenberg is correct that price would vary based on resolution. He just refers to this as screen size.

This is already happening, albeit indirectly: Amazon Instant Video charges different rates according to the stream's resolution: HD movies are usually $1 more to rent than non-HD movies. That's a lot of money on top of what is already a fairly expensive, 24-hour rental.

I think they'd make more money by lowering the price of rentals and having the same price for HD and SD streams.

Re: 2 inch screens !!!!

Re: You're wrong!

Hate to say it, but this is exactly the reaction I had when I read this. Sure, you could use "a $2 cable" to hook a smartphone to a TV (though last I checked, they cost more like $30 and most smartphones don't have the right ports for it), but it would look horrible on the TV.

EDID

It's easy to know the screen size if you are using an interface designed for computers (VGA, DVI, HDMI, DP): they all have a small memory chip with a data structure called the EDID, which tells the computer things like the available resolutions and the display's size in millimeters (if you are on Unix, try the "xrandr" command to see it in action; I don't know how to look up the values on other operating systems).

As others have already mentioned, this completely breaks down for projectors, since the image size depends on the distance between the projector and the screen. That doesn't matter, since they are greedy they would treat a projector as the largest screen size available ("movie-sized screen").

It's not possible to know the screen size with the old non-computer analog interfaces (RF, composite, component), but since these interfaces are not "protected" by their "encryption" they will probably not allow these interfaces to be used.

I think it's definitely possible for them to charge based on the resolution of the video file itself. They can charge more for 4k, which is mostly beneficial for large screens, and charge less for SD, which looks OK on small screens. If someone wants to watch a postage stamp-sized video on their 80" TV to save a few bucks then all the power to them, but my guess is that they won't want to do that and they'd rather spend up for higher quality.

There's talk of building Kinect into televisions. Other console makers have their own versions.

For licensing by screen size or resolution to work, you already need a new version of HDCP to ensure that the screen is reporting back the correct resolution. (Which of course wouldn't work with existing monitors, TVs, tablets and phones. Even those which are currently HDCP compliant cannot be upgraded.) Adding one more requirement is a no-brainer for those who feel so entitled.

Re: Anti-Circumvention Measures

Also, like with iTunes, it is a bit more complicated to circumvent different formats. Tried to play my movie from my macbook pro through a HDMI to VGA converter to my projector and it wouldn't project. Said that the display is an unrecognized format. It would play all my other movies and videos just not certain new movies from the iTunes store.

Re: You're wrong!

It's not already in use. Charging different rates for different formats is a far cry from charging based on the playback device. On one hand, the format is part of the product, while the delivery system is not. On a separate note, these price differences are partially to blame for the slow adoption rate of new formats.

Timothy Geigner gets it wrong. Very wrong.

A downloaded movie's pricing will almost certainly be based on video resolution -- not the actual end-user screen size, despite what the BBC article implies. It makes perfect sense to charge more for a high-resolution video (suitable for large 4K screens) than a low-resolution video that is unsuitable for anything but a cellphone.

I can pardon the (unnamed) BBC writer for being a technology dunce. But not a Techdirt writer. Come on, Tim, you can do better!

This is so idiotic that it boggles the mind. No screen in the world reports its screen size--they report its resolution (number of pixels). My 24in PC monitor has the exact same resolution as my 40in HDTV (1920x1080 pixels). No screen manufacturer is going to put the money into developing and implementing a system for a service that doesn't exist. And who will pay for this service if no TV supports it? It's like 3D TV all over again--how many people watch 3D movies at home?

Re: Re: Re: You're wrong!

When paying the "small screen" price, the server won't let you stream the video at full resolution. You can hook it up to the biggest screen you can find, but the resolution will be the same as on your cell phone's tiny screen.

Re: Re:

But if blurays cost the same as DVDs, we might be living in a world now where bluray is the norm. I don't want to pay a premium for better quality. If I'm paying for it I expect it to be delivered in the best quality available, but thanks to the bluray markup the world is rife with inferior DVDs.

Even that might not be a big deal if all I ever watched was my library, but what about movies friends loan you, movies you receive as gifts, movies from the public library, or the thousands of movies that aren't getting released on bluray?

Re: Re: You're wrong!

You're assuming that the player software needs to check the resolution of the device to determine the cost price. Its more likely that they just have to base the price based on the quality that you want for your device. If someone is happy with SD quality, yet is willing to pay a lot for a big 4K screen, fine. Would be a waste of your screen quality but some people will be happy with this. But it's more likely that people with a 4K device will set their preference to 4K quality movies. And people looking on low-quality mobile devices would set their standard preference to the lowest quality to save download bandwidth and storage. (And to improve performance since viewing a 4K movie on my Android phone will be really annoying.)

Maybe this isn't such a stupid idea from an economists point of view. You always want to charge more from people who are willing and able to pay more, this is the reason for discounts for students: People who already have a job can pay more.

I think that some economist simply realized that screen-size correlates with income and willingness to spend money on movies. (Of course, from the technical side it's crazy...)

Re: Re:

Maybe if that's the case, they should just state that home viewing is considered a "private performance" that requires a license just like a public performance. The charge will be based on the number of people, the screen size, and a host of other factors.

Re: EDID

This won't work - most likely people will start spoofing the EDID and set it to the smallest size possible. Just charge the films by resolution, and people can choose the quality they like. No mess or controversy attached.

Of course, this is not to mention that outcry that will occur if users with analogue non-EDID find out that they can't watch any movies PERIOD.

Re: EDID

Drivers can override the EDID data, and in some case they HAVE TO. This means that EDID data isn't suitable for DRM, since anyone could change the driver to report any screen resolution and size they want.

HDCP (on Blu-Ray, HD-DVD, satellite TV, cable TV) works by sending the encrypted video stream through the PC, driver and video card to the monitor untouched, and having the monitor itself decode it. Old non-HDCP compliant monitors and HD TVs won't work.

You would need a similar encrypted data channel going in the other direction for the EDID data, right from the monitor hardware to the stream's source. And since that's not part of existing standards, it won't work with any current screen of any size.

what sort of fucking half wit is this guy? does he stick his head up his ass when he wants to think of an idea? he must do because this one is so shit shaped it's untrue! what a prick! i suppose he expects everyone to rush out and buy 50" + sized screens just for the privilege of paying more! how the hell do these people get the high flyin', high profile jobs? is the main qualification having the intellect of a rockin' horse?

Re: Re: You're wrong!

Re: Re: Re: You're wrong!

"Its more likely that they just have to base the price based on the quality that you want for your device."

Leave off "for your device" and I agree with you, that seems more likely because it's actually doable. It's not, however, what Katzenberg is proposing. He specifically said "size of the screen", which is unrelated to the resolution of the video.

Re: Re: Re:

Rather than reporting, the plan is just to stop pirates altogether. In the story I linked to:

...In other words, if a license only covers one individual viewing and you're watching a film with friends or family, content simply won't play...

..."facial recognition techniques" could be used...

...The patent also mentions that age and identity can be detected in relation to whether a viewer is authorized to see particular content. The technology can also enforce time frames that users are allowed to see media...

If you "buy" a movie, not only can they stop the movie when others are in the room, but if they can stop it if someone else tries to watch it. Or if you watch it at the wrong time - like Disney was able to switch off purchased Christmas specials during the Christmas season because they retroactively wanted an exclusive.

Re: Re:

Well if they do, my TV is reporting it wrong. I just downloaded the freeware tool MonitorInfoView and the closest I could get to a size of screen result was the column marked "Maximum Image Size" which for some reason my 40/42" TV (can't remember which) says is 7.2 inch. All the other monitors that have been connected to my PC have their sizes reported correctly (such as 23.1" for my desktop monitor, or 31.5" for the living room TV) .

Re: You're wrong!

Re: You're wrong!

"Jeffrey Katzenberg is correct that price would vary based on resolution. He just refers to this as screen size."

I can't believe that a simple slip-of-the-tongue would end up spawning so many news articles, blog posts, and heated comments. This "story" is not the least bit news-worthy. Most of us understood perfectly well what Katzenberg meant, even if he might have said it somewhat clumsily.

Re: Re: Re: You're wrong!

What kind of phone do you have that can support a HDMI-out connector? Most smartphones I've seen have either a single USB-slave connector, or some crappy proprietary connector if you got an iPhone instead of something worthwhile. The only Android device I've ever seen with HTMI-out is the OUYA, and that's not a smartphone!

Katzenberg = Idiot

How are they going to determine the screen size? A simpler model would be:1 Release to theaters - worldwide at the same time2 About 1 month later release DVD, steaming video services (Hulu, Netflix), and to premium cable channels - worldwide at the same time.3 Finally release to non-premium tv/cable channels, maybe a 1 year later.

The first release to theater is likely to be determined by contracts anyway, so release there first but worldwide at the same time.

The second release is due to the major box office revenue normally does not last very long. So release the fee based services and to DVD, again world wide at the same time. But do this while there still is a buzz.

The third release is again is drive by the declining revenues from the first two releases. At some point you are not going cannibalize any sales in the other channels.

Re: Re: Re: Re: You're wrong!

My Samsung Infuse can do this out of the box. It comes with a special adapter cable that plugs into the USB slot on the phone on one end, and into the HDMI port on the TV on the other. It works very well.

Re: Re: Timothy Geigner gets it wrong. Very wrong.

I don't see it that way. Katzenberg was giving a talk to an audience, and I presume he may have been "dumbing it down" somewhat to make it more understandable to everyone. I myself do this sort of thing on occasion -- using different words when talking about a subject to non-technical people that I would never use when talking to technical people (who basically speak their own esoteric language).

Maybe Katzenberg doesn't understand the difference between resolution and screen size. But I suspect he probably does, but may have been using technically-incorrect terminology in order to make his point more understandable to a wider audience.

A Business Model with a Distant Similarity Was Once Common

I remember well when good old AT&T charged you based on the number of telephones you had in your house. Not the number of telephone lines, but the number of extensions. I do not recall when that practice changed, but once upon a time, if you wanted an extension, you had to pay for the privilege.

Re: Re: Re: Re: You're wrong!

It's a Blackberry Z10. It has a standard Micro-HDMI port, as my old Playbook tablet. You'll also find them on various Microsoft Surface, Motorola, Vizio, Acer and other tablets and phones, GoPro cameras, etc.

Samsung and Apple need proprietary adapters, but Samsung and others are moving to the Mobile High-Definition Link (MHL) standard.

Re: A Business Model with a Distant Similarity Was Once Common

"I remember well when good old AT&T charged you based on the number of telephones you had in your house. Not the number of telephone lines, but the number of extensions. I do not recall when that practice changed, but once upon a time, if you wanted an extension, you had to pay for the privilege."

It was the same for cable TV. So people just wired up a spliced line and used an independently-bought converter box, saving themselves a wad of cash every month. England used to also charge for television (tax) licenses based on the number of TVs in a house (Maybe they still do).

Re: Re:

Sure all modern digital panels do this, of course it has to be implemented properly (it's not in all cases). Do portable device screens do this? Maybe, who knows. How about analog HDTVs and SDTVs? Not a chance.

Re: You're wrong!

It's funny they already charge you more for the HD version compared to the SD version cause now ALL movies are done in HD so the more work goes into encoding an extra SD version (which should therefore cost more, traffic notwithstanding).

Re: Re: Per character

Re: Re: Re: Re: You're wrong!

Katzenberg is dumb from a technical perspective in my opinion. I don't think he understands the difference between screen size and resolution. But he does know that bigger screens tend to have bigger resolutions thus he thinks the two are related.I also assume that devices know the resolution they are using and are thus capable to select the proper resolution based on this while streaming movies. If you have a 4K projector/screen then it will most likely ask for the best resolution streaming, thus the most expensive package. Your phone probably knows it's screen is too small or that it doesn't have enough bandwidth to support movies at bigger resolutions. It would request the smallest resolution and thus has a great performance while displaying the movie over a slow Wifi connection.-Also, if a device knows the screen resolution, the viewer software on the device would also know it. The software can tell the stream which resolution it wants, thus linking screen size through resolution to the price of the movie. You might be able to change this preference, but it would result in a different quality of your movie.Which for some movies won't make much difference. You could look "Rio Grande" with 'The Duke' on your 4K device but it still won't change the quality of the images, since they have been made with an analog camera in black&white instead of full color.

Re: Re: You're wrong!

Actually, converting from HD to SD just means trimming some of the fat and delivering a smaller product. Converting can be fully automated so that's a couple of cents in the electricity bill but if the SD size is half the HD size, they will save a lot of bandwidth. (And they probably pay per gigabyte...)So, SD is slightly more expensive to create but a lot cheaper to distribute...

Re: Perhaps instead they should...

Re: Re: Re: Timothy Geigner gets it wrong. Very wrong.

Regardless of whether or not he knows the difference, he was still being a bit of an idiot. If he was "dumbing down" for his audience, he was doing it completely wrong. It's completely possible, especially for this topic, to make it understandable to a lay audience without being technically incorrect.

Regardless of all that, Tim & the reporters were talking about what he actually said. It's disingenuous to call them stupid for reporting his words accurately.

Re: A Business Model with a Distant Similarity Was Once Common

"I remember well when good old AT&T charged you based on the number of telephones you had in your house."

Yes, this was because you had to lease the phones from AT&T. It was illegal to use any telephone equipment that they didn't supply.

This started changing in 1968, when the FCC declared that AT&T had to allow Carterfone equipment to be used on their systems as long as the phones didn't adversely affect the network. The real sea change happened in the '80s, when third party phones became so affordable that people started buying and using them in quantity.

Re: Re: Re: Timothy Geigner gets it wrong. Very wrong.

All these arguments about resolution are cute, but are forgetting a basic fact...resolution is completely independent from screen size. The iPhone 5's resolution is 1136x640 pixels and is four inches diagonally. Virtually all 720p TVs are 1280x720 pixels and can be over 43 inches diagonally. That's a huge difference in screen size and an almost negligible difference in resolution (and bandwith, for that matter). This is ignoring most PC monitors, which easily support numerous different resolutions.

You can argue he's "dumbing it down" but that doesn't work when either way it doesn't make technical sense.

Re: Re: Re: Re: Timothy Geigner gets it wrong. Very wrong.

"a basic fact...resolution is completely independent from screen size. The iPhone 5's resolution is 1136x640 pixels and is four inches diagonally. Virtually all 720p TVs are 1280x720 pixels"

Even if your iPhone might have the processing power to decode high-compression/high-definition video, are there any cell providers (especially here in the US) that grant customers enough monthly bandwidth to make streaming (or downloading) HD movies and TV shows feasible, or would phone streamers have little choice but to choose a lower definition video to stay under the bandwidth cap?

While I agree that Katzenberg could have -- and should have -- made his point using more accurate terminology, I think that most of us understood what he was (clumsily) trying to say -- which was nothing we didn't already know years ago.

Re: Re: Re: Re: Re: Timothy Geigner gets it wrong. Very wrong.

Yes, my smart phone has the processing power to play HD video. My parents hook their phones up to the TV to watch Netflix all the time (they're in their 60s and retired and are constantly traveling).

"HD" video decoding isn't exactly the most intensive process. The iPhone 5, which is fairly old by smartphone standards, is a dual core 1.3 ghz processor with 1 gb of RAM. The phone my parents use, the Note II, is a quad-core at 1.6 ghz with 2 gb RAM. Either are plenty to run smooth, compressed video at 720 or even 1080p. I've used Chromecast to play Netflix on my projector screen at the same resolution as it plays from my computer.

You can try to spin it how you want but "screen size" is not a simpler way of saying "screen resolution." That's like saying "speed" is the same as "horsepower." Sure, the two could be related. But they're not. And when you come out and say you'll charge a 50 horsepower engine $10 for going 10 miles per hour and $5 for going 5 miles per hour, and then people say you really meant you'll charge $10 for 50 horsepower and $5 for 25 horsepower...well, you can't say that in a way that makes technical sense regardless of how you slice it.